November 11th, 2011

Rick Snyder and Mitt Romney may have similar backgrounds – both born and raised in Michigan, both cultivated moderate conservative reputations en route to winning governorships in traditional blue states.

But when it comes to the federal bailout of the auto industry in 2009, the two politicians have starkly different positions.

Romney, as a Democratic political ad reminded viewers this week, would have let Chrysler and General Motors go bankrupt. He elaborated on that position in this week’s Republican candidate debate held in suburban Detroit. “They should have gone through a managed bankruptcy process,” utilizing a private-sector bailout that provided funds and time for restructuring, he said.

Snyder disagrees.

“This was about more than these two companies,” he said. Bankruptcies would have had far-reaching consequences. “It would have brought down the whole supply chain and Ford,” Snyder said.

November 11th, 2011

Three stories making news across the Midwest today:

1. More complaints about Groupon. Some merchants have already swore off Groupon after they wound up losing money – or in some cases, their businesses – by running promotions with the Chicago-based company. Now comes another gripe. Merchants tell The Wall Street Journal that Groupon collects money immediately while payments to customers linger for more than 60 days, affecting their cash flow. Rivals of the daily deal site are offering faster payments, which puts a crimp in Groupon’s business model. Meanwhile, our partner station WBEZ reports Google is stepping onto Groupon’s home turf with daily-deal service.

2. Cain campaigns in Michigan. One day after a debate in suburban Detroit, Republican presidential candidate Herman Cain made stops across southern Michigan on Thursday. He discussed the state’s 11-percent jobless rate in Calhoun County, a key battleground that has been split in the two most recent presidential elections. “This is one of the greatest tragedies that we face, and that is we have all these people that are unemployed,” Cain told supporters, according to the Battle Creek Enquirer. Michigan voters head to the primary polls on Feb. 28.

3. Could Ohio become right-to-work state? Two days after voters defeated Issue 2 at the polls, a Tea Party group has started a push to turn Ohio into a right-to-work state. Ohioans For Workplace Freedom said Thursday it is seeking 386,000 signatures to put the issue on the Ohio ballot, perhaps as early as next November. Ohio is one of 28 states that require employees to join unions or pay fair-share dues in places where workers are represented by unions. “A lot of people in the patriot movement feel this was a key component of Senate Bill 5 that never came out,” Tom Zawistowski, president of the Portage County Tea Party, tells the Akron Beacon-Journal.

November 9th, 2011

A state-by-state roundup of key election news from around the Midwest:

Mixed news in Ohio: Union supporters succeeded in striking down a sweeping collective-bargaining state law, rejecting the Issue 2 referendum by a 61 percent to 39 percent margin. The result has been considered a rebuke of first-year Republican governor John Kasich and springboard for President Obama’s once-sagging numbers in Ohio.

Democrats should be reluctant to read too much optimism in the numbers, cautions The Plain Dealer of Cleveland. While Issue 2 failed, the lesser-known Issue 3 passed by an even wider margin. Issue 3, which proposed to prohibit the government from forcing participation in a health-care plan, won more than 66 percent of the ballots cast. It’s a sting delivered to Obama’s federal health-care law.

Implications of Michigan recall: State representative Paul Scott became the first Michigan office-holder to be recalled since 1983. He lost Tuesday’s recall election by eight-tenths of one percent, as 12,284 cast ballots for the recall and 12,087 against.

Gary, Indiana breaks new ground: Karen Freeman-Wilson has called Gary, Indiana a “blighted steel town on Lake Michigan’s southern shore.” She’s going to get a chance to clean it up. Voters elected Freeman-Wilson as the city’s mayor on Tuesday. In doing so, she becomes the first black female mayor in Indiana state history. She tells the Northwest Indiana Times she’s already working to make Gary a safer, business-friendly city.

Regional outlook: Changing Gears senior editor Micki Maynard examines the impact of Tuesday’s elections on first-year governors across the Midwest. Will the momentum that swept Republican governors. Rick Snyder, John Kasich and Scott Walker into office now work against them?

She explains that it’s not entirely a partisan issue. But on Tuesday, union supporters that protested collective-bargaining limits won the day. Heading into 2012, they hold the Midwestern momentum.

November 9th, 2011

At a certain point, you can’t tell if you’ve created the momentum, or the momentum has created you — Annie Lennox

There’s no doubt that the Midwest was swept this past year with political momentum. It deposited Republican governors into office in Michigan, Wisconsin and Ohio, and in turn, buoyed successful efforts to strip public employees of their collective bargaining rights.

Ohio Gov. John Kasich

But with the resounding defeat of Ohio’s Issue 2 on Tuesday night, it appears that momentum has been slowed, if not stopped. And now, like a tide rushing out, governors across the Midwest have to consider whether the momentum that led to swift changes will now work against them.

Those with the most to worry about include Republican governors John Kasich in Ohio, Rick Snyder of Michigan, and Scott Walker in Wisconsin, and the situation also could affect other politicians across the region, both Republican and Democrat.

To be sure, there are big differences in Midwest states and cities, and the situations that they face.

In Ohio and Wisconsin, nothing short of a political revolution took place. Those two governors were bold in their attacks on public employee unions, using budget crises as an excuse, pushing measures through their respective legislatures before union members had a chance to figure out what hit them.

In Michigan and Indiana, Republican governors have been more cautious. Both Snyder and Daniels have said they aren’t in favor of right-to-work efforts, even though Republicans in both states have called for them.

Daniels took action years ago against state employees, well out of a national spotlight. And Snyder has been judicious in dealing with collective bargaining rights. His one test of the vortex has been to give emergency managers the right to abrogate parts of union contracts in the state’s most deeply troubled cities.

One Democrat who has braved union members’ wrath is Chicago’s mayor, Rahm Emanuel. Throughout his campaign and in his early months as mayor, Emanuel made a longer school day his stop priority. He went around the city’s teacher’s union and offered incentives directly to city schools, including raises for teachers if they’d work longer hours.

Thirteen schools took him up on it, but the vast majority of schools steadfastly refused, setting up what promised to be a long and nasty confrontation with the Chicago Teachers Union.

Chicago Mayor Rahm Emanuel

Last week, Emanuel blinked in the face of a legal challenge by the union, and dropped his diversionary measure. The two sides agreed to collaborate on a compromise, rather than butt heads.

Perhaps Emanuel, schooled by Richard Daley and with two stints in the White House under his belt, saw what Kasich in Ohio failed to recognize and what must now concern Wisconsin’s Walker, who faces a recall movement in 2012.

Momentum, after all, is defined as “the impetus gained by a moving object.” And when political momentum goes against you, it could be best to just jump out of the way.

November 8th, 2011

Last week, Gov. Rick Snyder extolled the economic importance of Michigan’s rail industry. He believes it could transform Detroit into an international transportation hub that sits at the center of a line extending from St. Louis to Toronto or Montreal.

The mayors of four Canadian cities met today to discuss the development of just such a project on their side of the border.

Although they all support it, they’re less optimistic it could reach fruition. A study by the Canadian government last month concluded that high-speed rail between Windsor and Toronto is “not financially viable.” Estimated costs of that project have been approximately $20 billion, according to CBC News.

The mayors of Windsor, Sarnia, Chatham and London believe tell the news organization the study is short-sighted. They said such a rail line would actually make money – because of its connection to U.S. cities.

“Other countries, other competitive jurisdictions, are making the necessary investment because they’re saying the costs are certainly high, but the benefits far exceed the costs,” Windsor Mayor Eddie Francis said.

During remarks delivered at the Michigan Rail Summit in Lansing last week, Snyder said there would be economic benefits for both freight and passenger service. He said a rail-specific tunnel between Michigan and Canada would make it easier for container loads to pass international borders and that it would make it easier for the automotive industry to “do double-decking.”

On the passenger side, Michigan acquired 150 miles of track from Norfolk Southern last month along the Detroit-to-Chicago corridor, a stretch now slated for $200 million in upgrades that will prepare the line for enhanced-speed service.

U.S. Deputy Director of Transportation John Porcari said rail service between the two cities had been “severely degraded” in recent years and the track overhaul was just the start of upgrades that include new locomotives and cabin cars. Funds for those improvements come with a larger goal in mind.

November 4th, 2011

On Monday, Gov. Rick Snyder delivered the keynote address at the inaugural Michigan Rail Summit, an industry conference that examined several topics related to rail transportation in Michigan.

It was a timely speech for Snyder. Last week, he unrolled a major initiative to seek $1 billion for investments in Michigan’s transportation infrastructure. Rail’s portion of that is still to be determined, but Snyder called the rail industry a “lifeline” for Michigan business.

He wasn’t the only speaker at the Rail Summit. Others included John Porcari, the deputy secretary of the U.S. Department of Transportation and Kirk Steudle, the director of the Michigan Department of Transportation, among others.

Improvements along the Detroit-to-Chicago rail corridor were a central theme of the event. But Snyder and others emphasized that are should be viewed more broadly, as the epicenter of a line that stretches from St. Louis from Montreal. “It’s not about a piece of rail in Michigan,” Snyder said. There’s a reason for the emphasis.

Viewed alone, the 280-mile stretch between Detroit and Chicago would fall short of a federal requirement that stipulates a rail line must be 750 miles or more to qualify for certain federal funding. But it could be viewed as a “national system” under the Passenger Rail Investment and Improvement Act if officials determine the value of the line extends from St. Louis to Toronto (788 miles), Chicago to Montreal (850 miles) or St. Louis to Montreal (1,117 miles).

Transportation Competition

Snyder spoke of rail being a “lifeline” for manufacturing and agricultural exports. But when he pitches his infrastructure improvements, some believe the state legislature will balk at spending public money on something that could be construed as competition for the auto industry.

“A lot of road-construction guys are going to view rail investment as poaching on their territory, and vice versa,” said State Senator John Proos, who represents a three-county area in southwest Michigan. On transportation and infrastructure in the state, he said, “my colleagues see it as a siloed problem that we have.”

Porcari cautioned, “this is not a zero-sum game. The state that put America on wheels can remain confident that automotive will be a very important industry in the future. We need to work on all parts of our transportation system.”

What’s Next: Freight Edition

Snyder outlined a two-pronged approach to where potential rail investment would go in Michigan. For freight, he would like to see investments in efficiencies for intermodal freight yards in Detroit.

Also, he believes attention given to the possibility of building another bridge to Canada has overshadowed another project – the potential for a rail tunnel between the countries. A rail tunnel to Canada would, “make it easier for container loads to go through, and for the automotive industry to do double-decking,” Snyder said. “Those things should be very high on our list.”

What’s Next: Passenger Edition

For passenger travel, he said Michigan would continue to look at the Detroit-to-Chicago line as a critical piece of transportation. Last month, the state used $140 million in Federal Railroad Administration funds to purchase a 135-mile stretch of rail from Norfolk Southern. The purchase will allow Michigan to accelerate service along the line. Steudle said trains are already reaching 95 miles per hour in certain stretches, and testing will begin in a matter of weeks on stretches where trains can push 110 mph.

Also, he wants to ensure that a potential commuter rail project, which could run from Ann Arbor through Dearborn to Detroit, includes a stop at Detroit Metro Airport in its plans. He believes such a system could be tied in with the WALLY service scheduled to operate between Howell and Ann Arbor, a controversial project that Snyder endorses, incidentally.

“I don’t dismiss the WALLY at all,” Snyder said. “I’m going from Ann Arbor to Lansing, I’m going the better direction on U.S. 23. I see the traffic jams. It’s hard to believe there could be a more congested road.”

Ridership On The Rise

The number of people riding on Michigan’s three passenger corridors is rising, even as disruptions mount. n the service that runs between Detroit and Chicago, which Porcari called “severely degraded” in recent years, ridership increased 16 percent in 2010 and is currently up 4.9 percent in 2011. Revenues on the line increased $18 to $19 million, according to Steudle.

On the line that runs between Port Huron and Chicago, via stops in East Lansing and Battle Creek, ridership rose 27 percent in 2010, according to Steudle, with revenues increasing by $6 million. A third line between Grand Rapids and Chicago has increased ridership of 6 percent and a revenue increase of $3 million.

November 2nd, 2011

Some contradictory news emerged on the Michigan economy today.

The state’s economy is recovering from the Great Recession at the second-fastest pace of any state in the country, according to a Bloomberg index that measures the pace of state growth. Only North Dakota outpaced Michigan, which was led by the resurgence of Detroit’s automakers and local manufacturing.

Seventy percent of Michigan employers said they expected the state’s economic outlook would improve over the next 18 months, according to Bloomberg Businessweek, which first reported the results. But the financial magazine also said the improvement reflects the severity of Michigan’s decline – it ranked last in the index through 2010.

Michigan still has formidable challenges ahead. Elsewhere, a report released today by outplacement firm Challenger, Gray & Christmas showed that it ranks as the fourth-highest state or district in number of layoffs to date in 2011. The report said that 29,312 Michigan employees have been laid off so far this year.

November 2nd, 2011

Three stories making news across the Midwest today:

1. Chicago aldermen send Emanuel letter. Saying proposed Chicago budget cuts would hurt public safety and quality of life, a majority of the city’s 50 aldermen have called for Mayor Rahm Emanuel to alter his 2012 city budget. Our partner station WBEZ reports that 28 aldermen signed a letter that said the cuts would cause too many layoffs at city libraries, close too many mental health clinics and endanger public safety. Also, the letter stated they have “reservations” about the doubling of fees for city parking stickers for SUVs.

2. Projected layoffs drop across U.S. After planned layoffs across the U.S. hit a 28-month high in September, they dropped 63 percent to 42,759 in October, according to a new report. Government and financial sectors keyed the rebound, said outplacement consulting firm Challenger, Gray & Christmas. But “the two sectors are not out of the woods, by any means,” John Challenger, CEO, tells the Chicago Tribune. Employers have announced a total of 521,823 planned layoffs so far this year, a jump of 16 percent from 2010. The report comes in advance of Friday’s October jobs report from the federal government.

3. Michigan Senator Slams Currency Adjustment. U.S. Senator Debbie Stabenow of Michigan and a trade group that represents Detroit automakers criticized a decision by the Japanese government to lower the value of the yen. “Currency manipulation gives other countries an anti-competitive advantage and directly translates to lost American jobs, especially in Michigan,” Stabenow told the Detroit News. The automotive trade group that the move, the third this year, essentially subsidizes Japanese exports to the United States while weakening U.S. exports to Japan.